Louisiana refiners could be without power for six weeks; Reuters

oil Valero refinery Louisiana

Louisiana refiners could be without power for up to six weeks, which means that refining operations would also be knocked out. The maintenance and reparations cost could amount to the tens of millions of dollars, according to a Reuters report.

As we reported previously, Hurricane Ida landed on Port Fourchon, Louisiana, on Sunday. Hurricane stroke the land with 150-mile-per-hour winds that knocked out power on most of the state. After the loss of power, activity in refineries and even pipeline activities had to shut down.

According to the Reuters report, the damages are considerable: flooded refineries, knocked down power, and collapsed transmission lines. In fact, Louisiana Governor Jon Bel Edwards told residents of the areas hit by the storm not to return until electric utilities are back.

The blackout would leave with no power refiners like PBF Energy Inc., Phillips 66, and Valero Energy Corp. As outlined above, the costs for repairs could amount to tens of millions of dollars per company.

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Louisiana to face a hard couple of weeks ahead

In fact, last year, after Hurricane Laura wreaked havoc in the Lake Charles area in western Louisiana, Citgo Petroleum Corp., reported repair expenses of $29 million net of insurance recoveries. Also, Phillips 66 plant went out of commission for around seven weeks due to the lack of power and wind damage.

About the matter, Jefferson Parish councilman Deano Bonano said on Tuesday after hearing from utility executives. “We are going to be without power for four to six weeks.” Specifically, in Plaquemines Parish, home to Phillips 66’s storm-idled Alliance refinery, officials expect a blackout of around three weeks.

On the other hand, ExxonMobil said it has begun activities at its 520,000-barrel-per-day Baton Rouge refinery. The company reported that external power supply came back online, which allowed the refinery to operate at half capacity.

Finally, the process is going to be long and difficult. Robert Yawger, director of energy futures at Mizuho Securities USA, said restarts are neither safe nor easy. “You can’t simply flip the switch and bring neither production nor the refinery back online,” he said. Activities will resume as soon as power is back to the state.

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